Mitsubishi President Says MPG Scandal Threatens Its Survival

As an investigation widens in Japan on 25 years of confessed mpg data misreporting, Mitsubishi’s president and others say the company is at risk to survive.

“I’m taking this as a case that could affect our company’s existence,” said President Tetsuro Aikawa in a press conference yesterday speaking of admitted misdeeds for now confined to Japan. “My mission is to solve the issue.”

In addition to government regulators in Japan probing, the company’s board has assigned three ex-prosecutors to internally investigate over the next three months or so.

Bloomberg reports during this time there may be a lack of info on potential compensation and other details for affected investors, customers, and supply partner Nissan.

“Right now, understanding which cars and how many of them are at stake is the most important thing,” said Koji Endo, a Tokyo-based analyst with Advanced Research Japan to Bloomberg.

An estimated 625,000 Japanese market minicars were reported mis-tested, about three-quarters of which were supplied under contract with Nissan.

Depending on the actual number of improperly tested vehicles potentially beyond this number, the company “will get into a situation where its survival is difficult,” offered Endo.

And while headlines are comparing the quarter-century long policy of Mitsubishi’s misreporting to Volkswagen’s “Dieselgate,” the company is being suspected until evidence is found in the U.S.

In response to a query yesterday, the EPA said it is requesting info from Mitsubishi North America, and requiring it to do additional coast down testing to ensure U.S. compliance.

A representative for California’s Air Resources Board said yesterday given that the known issues were confined to Japan, and it does not do MPG testing, it would be “premature” to investigate. However, since then other reports says California is seeking unspecified info from Mitsubishi also.

The crisis is the worst since one narrowly escaped with help by Mitsubishi Group companies 15 years ago. At that time the automaker covered up axles which were defective from the assembly line and which led to some wheels falling off of moving vehicles, accidents, and some deaths.

Mitsubishi’s own internal jury is out for now on how it will compensate customers over the MPG concerns, including for financial incentives which will need to be paid back, but customers may not get much recourse for the time being.

“We aren’t able to deal with customers,” said Aikawa to reporters Tuesday, adding he was not aware of improper vehicle testing. “We’re just telling them that we’ll offer something.”

Mitsubishi may have to pay back government tax rebates for minicar sales that it should not have been eligible for, said an executive vice presindet, Ryugo Nakao.

Additionally, Aikawa said Mitsubishi is considering how to reimburse Nissan which has voluntarily ceased selling vehicles called the called Dayz and Dayz Roox which are sold only in Japan.

These latest updates come following yesterday’s disclosure of an initial report of findings to be resubmitted May 11 by Mitsubishi demanded by Japan’s transport ministry.

Of this, a transport ministry official said this requested data for the investigation into the company accused of misreporting data was insufficient.

Bloomberg